ITAM affects all aspects of the enterprise, from profits to legal obligations to operational effectiveness.
Just as a cutting-edge technology or services can drive a company's earnings, mismanagement of its assets and operations can erode profits, no matter how substantial. Managing IT assets is not just about managing hardware and software within the enterprise, but it's also about how it effects risk exposure, operational inefficiencies, legal obligations, compliance standards, and costs. Failure to manage IT assets effectively can result in legal liabilities and proceedings, financial reporting errors, hefty fines associated to industry legislation, and excess spending of financial and human capital. Companies can save up to 30% in management costs per asset in the first year, according to Gartner Inc., and an effective asset management program can reduce their total cost of ownership by 10% to 15%, on average.
In the end, and right here at the beginning, you must understand that managing an asset effectively requires understanding the total costs associated with the asset. Understanding how the asset supports business critical services throughout its life span is also crucial. It is vitally important to ensure that you have both an accurate analysis and understanding of the costs associated with budgeting, allocation, accounting, and service valuation for every asset. Determining IT's true return on investment without this information is not doable.
Answering the following five fundamental questions provides a snapshot of the effectiveness of your current asset management strategy, assuming that you have one:
- What IT assets are in your possession?
- Do these assets support the profitability of your business?
- How do these assets support your business?
- How much is it costing your business to maintain these assets?
- Is the return worth the cost?
Only a fraction of organizations have reached maturity in ITAM, the level where processes designed for best practices are in place and continually improve the strategic alignment, cost effectiveness, and integration of IT assets. You are now equipped to define the challenges you face and organize and build a consensus for change. In the next chapter, you will learn how to create your ITAM strategy and plan.